KBR, INC.(KBR)Q2 2026 法說會逐字稿

Hello, everyone. Thank you for joining us, and welcome to KBR's Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Rachael Goldwait, Head of Investor Relations.

Thank you, and good morning. Welcome to KBR's Second Quarter 2026 Earnings Call. Joining me today are Stuart Bradie, President and CEO; and Shad Evans, Executive Vice President and CFO. Stuart and Shad will cover highlights from the quarter, and then we'll open the line for your questions. Today's earnings presentation is available on the Investor Relations section of our website at kbr.com. As outlined on Slide 2, today's discussion includes forward-looking statements and certain non-GAAP financial measures. Additional information, including reconciliations to the nearest GAAP measures can be found in the presentation appendix. With that, I'll turn the call over to Stuart.

Thanks, Rachael, and good morning, everyone. I will pick up on Slide 4. Before we get into the meat of the presentation, I wanted to briefly highlight our 2025 Sustainability and Corporate Responsibility report, which we published a few weeks ago. This is our fifth year issuing a report, and it reflects an important part of how KBR operates. Sustainability, safety and responsible delivery are embedded in how we manage risk, develop our people and, of course, deliver for our customers. This year's report highlights record safety performance, continued progress against our environmental commitment, and 35% of revenues focused on sustainability. As we move toward operating as two companies, that operating discipline will remain an important part of the culture and the value proposition of both businesses. On to Slide 5. Today, we will focus on four key messages. First, we delivered a strong first half with the results tracking slightly ahead of our planned cadence. Second, we have strong visibility across both businesses, supported by record backlog in STS and significant awarded work in MTS that has yet to be reflected in backlog. Third, our planned separation remains firmly on track, with transaction, leadership and Day 1 readiness milestones continuing to advance. And finally, we are reaffirming our 2026 guidance and remain focused on execution, cash generation, disciplined capital allocation and, of course, a successful separation. Moving to Slide 6. This slide highlights our progress against the four strategic pillars that continue to guide KBR. Our focus on operational excellence and capital deployment here and then discuss growth and differentiated solutions on the next two slides. On operational excellence, we continue to execute for our customers while standing up two stand-alone companies. Importantly, that work has not distracted us from delivering for our customers, growing the business or executing against our financial commitments. We continue to win in the market, build backlog across both businesses and deliver solid performance with year-to-date adjusted EBITDA margin of 13%, keeping us on track for another strong year. At the same time, we're taking actions ahead of separation to reduce incremental stand-alone costs and mitigate dis-synergies. Across both businesses, we are simplifying organizational structures, driving productivity and increasing accountability so that each company enters 2027 with a leaner cost base and stronger margin potential. For SpinCo, the priority is establishing a stand-alone public company while maintaining competitive rates and preserving our position across both cost-plus and fixed-price opportunities. Our objective remains rate neutrality, and we continue to make good progress towards that goal. For New KBR, we're building a lean, scalable organization that can support future growth while maintaining strong margins and disciplined cost management. Next, on capital deployment. We continue to allocate capital in a disciplined manner, investing roughly $190 million in the first half to strengthen the portfolio while also returning an additional $71 million to shareholders through dividends and share repurchases, bringing total capital deployed to $261 million. We remain focused on maintaining the flexibility needed to support separation, invest in growth and pursue attractive value-creation opportunities. In short, we are executing the strategy, preparing both companies for a successful separation and positioning each business to create greater value as a focused stand-alone company. With that as a backdrop, let's move to Slide 7 and discuss the STS business. The demand trends we discussed last quarter continued to strengthen during the second quarter, reinforcing our confidence in the long-term outlook for Sustainable Tech. Demand remains broad-based across energy security, food security and sustainability-focused investments, supported by both new project activity and long-standing customer relationships. Those market dynamics continue to translate into strong commercial results. Second quarter book-to-bill was 1.5x, and trailing 12-month book-to-bill was 1.3x. Backlog ended the quarter at a record $5.5 billion, which is up 40% year-over-year. In addition, our near-term pipeline now exceeds $6 billion, excluding large reimbursable LNG EPC opportunities, which would grow the number significantly. Importantly, work already under contract represents approximately 80% of our 2026 revenue guidance midpoint. We're also seeing an increasing mix of OpEx-related work. Approximately 34% of year-to-date bookings were tied to OpEx-based contracts with activity across both the Middle East and the Americas through Brown & Root. These contracts are generally longer in duration and further enhance the durability, visibility and resilience of the business. We remain encouraged by the level of OpEx-related opportunities moving through the pipeline. The Middle East remains a significant growth driver, where first half bookings exceeded $900 million across oil, gas, NGL and energy infrastructure projects. We are also seeing encouraging momentum across our technology portfolio, including our first commercial PureSAF license awards and continued demand for our market-leading ammonia technologies, including the recent Pampa Energia award in the Americas. More broadly, many of these opportunities build on relationships that begin with technology licensing, studies or engineering services and ultimately expand into larger project execution or aftermarket scopes, creating additional revenue opportunities while improving long-term visibility. Taken together, we believe STS remains well positioned for continued growth and provides strong visibility into future revenue and earnings. On to Slide 8. Turning to MTS. We continue to see strong demand across our Defense Systems Modernization, Space and Global Mission Operations businesses. Our strategy remains focused on combining trusted mission expertise, customer intimacy and differentiated technology solutions to address some of our customers' most critical priorities. That demand is supported by strong visibility into future performance. Approximately 94% of our full year revenue guidance is already under contract. We have roughly $10.4 billion awaiting award, and we expect more than $25 billion of bid volume in 2026, which is up approximately 50% year-over-year, with significant submissions in the second half. Second quarter book-to-bill was 0.8x, with a trailing 12-month ratio of 1.0x. Importantly, those metrics do not yet reflect approximately $10.6 billion of awarded work currently under protest, including the National Science Foundation Antarctica award, the Department of State award in Iraq and the classified Paycom Logistics award. As a result, we believe reported backlog and book-to-bill do not fully reflect the level of awarded work and future revenue visibility in the business today. While the timing of protest resolutions remains outside our control, these are awarded programs supporting enduring customer priorities. More broadly, our success continues to be driven by the mission expertise and customer relationships we've built over decades. The National Science Foundation Antarctica award is a good example. While NSF was a new customer for KBR, the award reflects several years of engagement, mission understanding and demonstrated technical capability highlighting the differentiated approach that continues to create opportunities across the portfolio. We are also increasingly embedding software, AI and digital capabilities into missions we already support, helping customers modernize operations, improve decision-making and deliver faster outcomes. We also see opportunities to support emerging priorities such as Golden Dome, where KBR already supports customers across many parts of the broader mission environment. In short, demand remains healthy across our global market. Visibility remains strong, and our differentiated capabilities continue to support long-term growth. As we prepare to launch this business as a stand-alone company, we are also taking an important step in establishing its identity in the market. Now let me turn to Slide 9 and introduce the new name for the MTS spin-off: Trinzic. The name is inspired by the word intrinsic and reflects essential built-in capabilities and deep expertise. Trinzic harnesses the power of technology to support governments, partners and allies across national security and space. We work at the frontier of what is technically possible, bringing new capabilities to the systems the world depends on, and giving customers the confidence to act. The tagline for Trinzic is "The Bold, Connected." I think this captures the essence of the business. Trinzic designs solutions that hold up when there is no margin for error and in environments where critical systems must perform. Just as importantly, Trinzic gives us the opportunity to tell the story of how this business has evolved. While our foundation remains our deep expertise in trusted performance, today's Trinzic is increasingly defined by the way it connects people, technology and critical systems with speed, precision and rigor. We believe the brand better reflects both the company we are today and where we are headed next. It also reflects a culture built around collaboration, accountability and delivering results. As we've discussed on today's call, this business is entering its next chapter with strong customer relationships, differentiated capabilities, global reach and significant growth opportunities ahead. We believe Trinzic reflects both our heritage and our exciting future, bringing intrinsic value and advantage to customers. On to Slide 10. We continue to execute well against our separation plan and remain on track to complete the spin on a target date of January 4, 2027. On transaction readiness, we continue to make progress across key regulatory and transaction milestones. We submitted our final private letter ruling request to the IRS in June and expect a final ruling in September. We also continue through the SEC review process for the Form 10 with a public filing expected ahead of our next earnings call. Operationally, the work is shifting from planning to execution: IT systems, contract bifurcation, procurement separation, corporate budgeting and organizational design are all progressing against plan. Corporate employees have been aligned to their future organizations and the teams are focused on filling the remaining critical roles, so both companies are ready to operate effectively from Day 1. We are also building out the Trinzic leadership team. Michael LaRouche will join as CEO designate in September, bringing nearly 30 years of experience across defense, intelligence, space, cyber and government services. Nick Veasey joined as CFO designate earlier this month, with deep experience across finance, capital markets, M&A and investor engagement. The majority of the Trinzic leadership team is now firmly in place, and the boards for both companies are taking shape as we assemble the skills necessary and the experience needed to support each company's stand-alone strategy. Looking ahead, we're excited to host Investor Days in New York for both New KBR and Trinzic, where we will outline the stand-alone strategies, the financial framework and the long-term priorities for each business. Overall, I'm pleased to report the separation is progressing well. The leadership foundation is taking shape, and we have strong visibility into the key milestones required to successfully launch both companies. With that, I'll hand over to Shad.

Thanks, Stuart. I'll pick up on Slide 12 with our consolidated second quarter results. Revenues for the quarter were approximately $2 billion, up $32 million or 2% from prior year. As a reminder, this was the final quarter lapping elevated EUCOM contingency activity in 2025. Excluding that work, revenue increased by approximately $91 million or roughly 5%, driven by continued ramp-up on recently awarded projects across both segments. Adjusted EBITDA increased $16 million to $258 million, with adjusted EBITDA margins expanding approximately 60 basis points to 13%. Performance was driven by strong project execution, favorable portfolio mix and disciplined cost management across the business. Adjusted EPS increased $0.08 to $0.99, driven by strong operating performance, lower below-the-line expenses and lower diluted share count resulting from our repurchase activity. Turning to cash flow. First half adjusted operating cash flow was $183 million, representing adjusted OCF conversion of approximately 74%. As expected, second quarter cash flow reflected collections timing in STS, Middle East. Collections have started to normalize in July, and our full year outlook remains unchanged. Overall, we are pleased with the first half performance. We delivered profitable growth, expanded margins and continued to see healthy momentum across both segments as we enter the second half of the year. Turning to Slide 13. I'll walk through segment performance. Beginning with Sustainable Technology Solutions. Revenue increased $60 million or 10% year-over-year to $676 million, driven by continued ramp-up of projects awarded over the past 12 months, with particularly strong growth in the Middle East, Latin America, Asia and Australia. Revenue also increased 8% sequentially, reinforcing our confidence in delivering mid-teens revenue growth for the full year as project activity accelerates in the second half. Adjusted EBITDA was $123 million, down $11 million from the prior year due to project mix. This quarter included a higher proportion of equipment procurement activity, which carries margins at the lower end of the framework we outlined last quarter. This impact was partially offset by strong project execution and continued healthy demand across the portfolio. Adjusted EBITDA margin was 18.2%, while adjusted EBITDA margin, excluding LNG JV earnings was approximately 13%. Importantly, year-to-date adjusted EBITDA margins, excluding LNG JV earnings remained approximately 14.5%, demonstrating the underlying earnings power of the business and keeping us on track to achieve our full year outlook of mid-teens, excluding LNG JV earnings. Turning to Mission Tech. Revenues were $1.3 billion, down $28 million from prior year. Excluding EUCOM contingency activity, revenues increased approximately $31 million or 2%, reflecting strong activity in Australia and the U.K., partially offset by project completions in the U.S. Adjusted EBITDA increased $22 million to $158 million, with margins expanding roughly 190 basis points to 12.1%. Performance benefited from favorable mix, disciplined cost management, and benefited from contract closeouts. Year-to-date margins of 11.4% remained modestly ahead of our full year outlook. Overall, we were pleased with the segment performance during the quarter. Both businesses continue to execute well, deliver profitable growth and maintain strong momentum as we move through the back half of the year. Turning to capital allocation on Slide 14. Net leverage ended the quarter at approximately 2.3x trailing adjusted EBITDA, flat sequentially and comfortably below our 2.5x target. As working capital normalizes and cash generation strengthens in the second half, we expect leverage to continue trending downward through year-end. We also maintained a disciplined approach to capital allocation, repurchasing approximately $25 million of shares during the quarter while preserving ample liquidity. As we prepare for separation, we remain focused on positioning both companies with capital structures and financial flexibility needed to execute their growth strategies and create long-term shareholder value. Overall, we are confident in the strength of our balance sheet, our capital allocation framework and the readiness for both businesses as we move towards separation. On to Slide 15. Today, we're reaffirming our full year guidance across revenue, adjusted EBITDA, adjusted EPS and adjusted operating cash flow. The business continues to perform in line with our expectations, supported by strong execution, a healthy demand environment and strong revenue visibility. Approximately 89% of our expected revenue for the year is already in hand, including 80% for STS and 94% in MTS. Given our first half performance and the strength of our backlog, we remain confident in our ability to deliver on our full year outlook. With that, I'll pass it back to Stuart.

Thanks, Shad. And to wrap up on Slide 16, there are four key takeaways from the quarter. First, we continue to execute at a high level across both businesses. First half results demonstrate the strength of the portfolio, profitable growth, margin expansion and solid momentum heading into the back half of the year. Second, demand remains healthy and visibility remains strong. Across both businesses, we are supported by substantial backlog, significant awarded work and a healthy pipeline, giving us confidence in both our near-term outlook and our longer-term growth opportunities. Third, confidence in the separation continues to build. Transaction milestones are progressing as planned. Operational readiness is advancing, and we're increasingly shifting from planning to execution as we prepare for Day 1. And finally, we're positioning New KBR and Trinzic as two focused, highly differentiated companies with strong market positions, disciplined operating models and a clear path to long-term value creation for our shareholders. With that, I'll hand it back to the operator, who will open the call for questions.

Your first question comes from the line of Mariana Perez Mora with Bank of America.

So my first question is, you mentioned Trinzic is the new name, everything is on track, and you have a strong management team designated. Now you mentioned the financial structure and the financial capability for both these businesses to be able to pursue their goals. How should we think about that broadly?

We are setting both businesses on the right path, Mariana. You'll have seen the book-to-bill, particularly in STS, is very strong, and obviously awards, when you include what's under protest in MTS, show both businesses heading strongly toward year-end with momentum as they look to separate. The whole piece around where the businesses are looking to operate is being de-risked as we progress towards the spin date. Operational readiness mentioned in the prepared remarks is key, and we continue to progress on all fronts. In terms of capital structure going forward, we are very clear that both will have normative leverage ratios for their businesses, given where our balance sheet sits today; I think you can translate that quite clearly. We've communicated that historically. Pleasingly, both on a year-to-date basis are performing at the margin levels we expected. Our commitment was that we would not distract the core business while we execute the spin process, which is a heavy lift. We had a dedicated team focused on doing that, and we've made significant progress in both counts: not just with the spin, but actually delivering on the commitment not to distract the business. The underlying performance represents that. We'll have Investor Days and our Capital Markets Day in November. That will be the time where we set out the investment thesis for both businesses, which will be different and suitable for the stand-alone business cases.

Great. And then on STS or New KBR, how should we think about the volatility of margins on a quarterly basis going forward, especially as you have more pass-through materials in a quarter or CapEx versus OpEx mix? How should we think about that volatility going forward and the trend from mid-teens over the next three to five years?

I think we'll get into the longer-term margin profile during Investor Day, but what I'll say as it relates to 2026 is the full year margin outlook for STS remains unchanged. The quarterly variability that you see in the P&L this quarter is normal; it reflects project mix, particularly the procurement content that moves through the STS segment in a normative way. We've seen that pattern historically, and this quarter is no different. As importantly, year-to-date margin performance excluding LNG equity and earnings is 14.5%, which is consistent with our expectations and puts us in a strong position to deliver on the full year commitments in STS.

Your next question comes from the line of Ian Zaffino with Oppenheimer.

This is Isaac Sellhausen on for Ian. My first is just on STS. As far as the awards in the first half of the year, maybe you could talk a little bit about geographic mix, maybe specific to the Middle East awards, and how that has trended compared to expectations. And are you still seeing any customer uncertainty with oil and gas customers at all?

We're seeing a global mix in our award cadence. Last quarter we saw significant awards in the Middle East, and this quarter you'll see 54% of the awards were actually in the Americas. That's across a range of technology sales, and we announced the Pampa award in Argentina. We have ongoing work in Mexico, including LNG and services and asset services, so there's good mix with the Middle East coming in around 25% to 26%. So continued momentum in the Middle East, but it's very much a global business. Regarding the Middle East itself, although there's increased activity related to the conflict, we haven't seen any disruption to our ongoing work. We continue to deliver for our customers; all our personnel are in place and doing the work, and our customers appreciated that through Q1 and into Q2 and Q3. One anomaly is slower payments in times of volatility; we were seeing signs of recovery as we entered the end of the quarter, but there may be some disruption to cash. Overall, in terms of revenue and EBITDA performance, customers are paying eventually, and we expect to catch up as we progress. That's why we've maintained guidance in cash because we expect collections to return to normative levels. In summary, no real disruption to operations, but some timing impacts on cash.

Understood. And then just as a quick follow-up, as far as preparing the two businesses ahead of the spin, you talked about simplifying the cost structure. Maybe you could give a brief overview of what is left to do ahead of the spin, and are you able to provide any details as far as potential run-rate savings from those cost actions?

We touched on this in the prepared remarks. We're making good progress on stand-alone costs across both businesses and we're not waiting until separation to address this. We're ahead of the game. The actions we're taking today, including real estate rationalization which you'll see in the quarter through lease impairments, continue to simplify our footprint and position both companies for Day 1. For Trinzic, the objective is rate neutrality, so we're designing the company to fit within the cost structure already embedded in our rates today. That's important both for cost-plus and to remain competitive on fixed-price opportunities. We've made significant moves within Trinzic towards that goal. On the New KBR side, we continue to build a fit-for-purpose organization: reducing complexity, simplifying how we operate and building a strong digital backbone to drive greater efficiency. We see meaningful opportunities to operate more effectively as a focused stand-alone company. We'll provide more detail on both companies' cost structures, operating models and the path forward at our upcoming Investor Days, but today we're encouraged by the progress and remain confident in our approach.

Your next question comes from the line of Tobey Sommer with Truist Securities.

It's Henry on for Tobey. Just to start with guidance and looking into the second half on the margin side: your guidance reiteration implies a meaningful step down in margins from the first half. Can you remind us the puts and takes there and any potential upside to where guidance is now?

We're really encouraged by the first half performance and believe it reinforces our confidence in the full year outlook. Visibility remains strong with work under contract in hand for both STS and MTS. That said, we're only halfway through the year, and while we're tracking ahead of plan on awards, there's still quite a bit ahead of us in terms of awards, program activity, execution milestones and Washington dynamics that need to play out. We believe that the 12.4% aggregate margin for the full year puts us in a solid position to deliver across EBITDA and EPS commitments. Given the remaining uncertainty and the work left to complete in the year, that's why we're reaffirming guidance rather than making changes today.

Understood. And then switching to the STS side: you've had some good announcements in that business recently. Could you frame those from a financial perspective given the planned roll-off of Plaquemines next year and how you're working to bridge that gap going into 2027?

We're not looking for a single project to replace Plaquemines. What gives us confidence are the leading indicators: quarter-to-date book-to-bill was 1.5x and trailing 12-month book-to-bill is 1.3x. Backlog is roughly up 40% year-over-year. Our two-year pipeline has grown about $6 billion, excluding large LNG reimbursable EPC opportunities. The end markets we serve remain strong and global. We're seeing demand driven by energy security, food security related to ammonia, urea and fertilizer, and resilience in an increasingly complex world. We're also seeing awards in Europe and Asia for sustainability-focused solutions. While Plaquemines will naturally wind down over time—it goes through the first half of 2027—we feel good about the growth outlook for STS because it's supported by a broad set of opportunities, not a single project. We'll give more detail at Investor Day, but we're confident about how we're addressing the backfill challenge.

Your next question comes from the line of Jerry Revich with Wells Fargo.

This is Andrew Azzi on for Jerry Revich. You discussed adding more than a couple thousand employees for recent awards last quarter. Any update on how many are onboarded, how quickly they're becoming billable and what the revenue runway for some of these Middle East ramps should contribute exiting the year?

You're correct: we announced a significant hiring influx and that number is actually well above the figure we initially noted. Those people are onboarded and working for us in the Middle East now, and we've made great progress staffing up the projects secured earlier in the year. STS revenue growth for the year is in the mid-teens, and that ramp supports that growth. Both numbers align well, and we continue to be confident in our outlook for the full year.

Appreciate that. You also flagged potential cash flow volatility from the Middle East. Can you quantify if that actually occurred and the actual impact, whether that's timing or structural, and give a recovery cadence through year-end?

We flagged the expected cash performance being largely timing from Middle East payments due to the conflict. Conditions improved as we exited the quarter, and we view this as a timing issue rather than a change in the underlying cash generation profile of the business. While the duration of the conflict remains uncertain, our view is that full year cash flow from a guidance perspective remains unchanged.

Your next question comes from the line of Adam Bubes with Goldman Sachs.

This is Anuj on behalf of Adam. On the MTS segment, margins were up to 12% this quarter. Can you parse out what in the portfolio is driving the strong execution? In the past you framed MTS margins around 10% plus; is that still the right way to think about the run rate?

Favorable contract closeouts are a normal part of managing a large and complex global portfolio. The resolution this quarter was consistent with our expectations and reflects disciplined contract management, customer engagement and risk management. Margins in MTS are running a bit higher this year at about 11% on a year-to-date basis, which is ahead of plan. But we still believe the long-term 10-plus percent margin target we've given is an appropriate way to model this business, at least through the end of the year.

Got it. And on the recently awarded $8 billion Antarctic Science project, how should we think about the annual revenue run rate, the margins, and what's the ramp profile like in the early years?

It's $8 billion over 20 years and will ramp up over the first couple of years. We can't give precise guidance until we are officially on the job and begin execution, but a reasonable reference is the incumbent's run rates, which vary by year somewhere in the range of roughly $150 million to $300 million depending on the year. We'll have better clarity once we're on contract and working through the ramp.

Your next question comes from the line of Michael Dudas with Vertical Research Partners.

Encouraging progress on the spin. Looking at New KBR after the spin, what have you found in assessing the business model about where the company is positioned as a stand-alone, and its stand-alone opportunities? On the OpEx front, are you encouraged about opportunities there? Any emerging technologies or opportunities within the portfolio that might be getting more visibility over the next couple of years relative to the core—the ammonia stuff and hydrocarbon technologies you are known for?

That's a big question. We have emerging technologies we're excited about and will give examples at Capital Markets Day in November. We're also excited about combining our engineering expertise with physics-based AI to drive market-leading operational performance. We're test-casing that on our licensed ammonia plants, with two customers running it now; we'll update at Investor Day on how that can impact KBR and position us in operations and maintenance with different commercial advantages. We're also excited about the broader-based opportunity in markets where we go in early; our geographic expansion and relationship base create high barriers to entry. A more focused management team that wakes up every day thinking about this will drive significant opportunity. We're delivering well today, increasing backlog, and the pipeline is very strong. Our reputation for delivery is an asset. Overall, we're excited about potential growth drivers and margin enhancement as we head into 2027.

Looking forward to November 11. Quick follow-up: you mentioned $6 billion in pipeline for STS. Anything to call out there we should look at? And an update on plastics recycling projects?

The pipeline is a mix of CapEx in Europe, CapEx and OpEx in the Middle East, and CapEx in the Americas and Australia. It includes technology sales and proprietary equipment associated with that business. It's broad-based and our conversion rates remain high given our positioning and ability to win. Regarding plastics recycling, progress is reasonable but slower than desired at the Mura Teesside plant in England. They have their final technical solution to run the plant continuously and it goes on stream now. We should be able to give an update in the Q3 earnings on progress. Mura has an exciting project pipeline in Europe and Asia, and those projects are moving along well. We'll provide more on Mura and our technology development story at Investor Day.

We have reached the end of the Q&A session. I will now turn the call back to Stuart Bradie for closing remarks.

Thank you very much. A few final thoughts to close. When we announced our intention to separate the company, we believed KBR contained two very high-quality businesses that could create more value as focused stand-alone companies than they could together. As we've moved through the separation process, that conviction has only strengthened. In Sustainable Technology Solutions, we're seeing strong demand, record backlog and growing visibility supported by long-term investments in energy security, food security and sustainability. In Mission Tech, demand remains strong, visibility continues to build, and opportunities across national security and space remain compelling. Today's introduction of the Trinzic brand is an important milestone and, together with the leadership team, marks the beginning of an exciting new chapter for the business. Trinzic gives the business the opportunity to tell the story of what it has become and how it brings together people, technology and critical systems to help our customers move forward with confidence. Both organizations are entering this next chapter from a position of strength with significant revenue visibility, strong market positions and a clear path to long-term growth—and equally important, with an amazing group of people in both organizations. As we approach separation, we're more confident than ever in the opportunities ahead for both New KBR and Trinzic and in the value each company can create as focused stand-alone businesses. Thank you for your continued support, and thank you for your interest in KBR today.

This concludes today's call. Thank you for attending. You may now disconnect.